26-Oct-2026 11:24:38
FAIRCHEM ORGANICS Q2 CONCALL : TARGETS 5–10% QUARTERLY GROWTH, EXPECTS HIGHER CAPACITY UTILIZATION & PLANS NEW IMPORT-SUBSTITUTION PRODUCT LAUNCH IN Q3
• MANAGEMENT EXPECTS CAPACITY UTILIZATION TO IMPROVE FROM CURRENT 60–65%, SUPPORTED BY BETTER RAW MATERIAL AVAILABILITY • MANAGEMENT AIMS FOR 5–10% QUARTERLY GROWTH, WITH APPROXIMATELY 5% QUARTERLY CAPACITY IMPROVEMENT DISCUSSED • H2 FY27 PERFORMANCE EXPECTED TO IMPROVE, SUPPORTED BY LOWER RAW MATERIAL COSTS, HIGHER PRODUCTION & STRONGER REALIZATIONS • CRUDE SOYBEAN OIL IMPORT DUTY REDUCED TO 11% FROM 16.5%, EXPECTED TO IMPROVE RAW MATERIAL AVAILABILITY & PROCUREMENT COSTS • MANAGEMENT EXPECTS RAW MATERIAL PRICES TO SOFTEN FURTHER, WITH BENEFITS LIKELY TO BECOME MORE VISIBLE DURING H2 FY27 • CHINESE DIMER ACID DUMPING HAS REDUCED, SUPPORTING DOMESTIC PRICING & IMPROVED PRODUCT REALIZATIONS • AVERAGE REALIZATION UP 27.36% YOY TO ₹135/KG VS ₹106/KG, WITH 3.85% QOQ IMPROVEMENT • MANAGEMENT EXPECTS TO MAINTAIN CURRENT EBITDA MARGINS, WITH FURTHER IMPROVEMENT POSSIBLE THROUGH LOWER INPUT COSTS & HIGHER UTILIZATION • MANAGEMENT ASPIRES TO 15–18% EBITDA MARGINS OVER TIME, ALTHOUGH NO FORMAL TARGET OR TIMELINE HAS BEEN PROVIDED • NEW IMPORT-SUBSTITUTION PRODUCT TARGETED FOR COMMERCIALIZATION IN Q3 FY27 AFTER DIWALI, USING A NEW TECHNOLOGY-BASED PROCESS • NEW PRODUCT EXPECTED TO OFFER DOMESTIC IMPORT-SUBSTITUTION & EXPORT OPPORTUNITIES, WITH INITIAL PRODUCTION PLANNED AT SMALL CAPACITY • VALUE-ADDED FATTY ACID DERIVATIVES EXPECTED TO COMMAND 5–10% HIGHER REALIZATIONS, SUPPORTING PRODUCT MIX IMPROVEMENT • ISOSTEARIC ACID EXPORT APPROVALS COMPLETED OR PROGRESSING IN SEVERAL MARKETS, WHILE U.S. EXPORTS DEPEND ON FREIGHT COST NORMALIZATION • MANAGEMENT DOES NOT PLAN IMMEDIATE MAJOR CAPACITY EXPANSION, WITH FUTURE CAPEX DEPENDENT ON SUCCESSFUL NEW PRODUCT COMMERCIALIZATION • WEAK EUROPEAN COSMETICS DEMAND, HIGH EXPORT FREIGHT COSTS, RAW MATERIAL PRICE VOLATILITY & NEW PRODUCT COMMERCIALIZATION DELAYS REMAIN KEY RISKS
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